What was a rapid area of new growth is starting to drastically slow down, as broadband adoption by Internet users in the U.S. dropped from a 20% increase in the November 2003-May 2004 time period to a 3% increase in December 2004-May 2005. In May 2005 an estimated 53% of Internet users were accessing the Web via a broadband connection.

The study, conducted by the Pew Internet Project, also found that there are currently fewer dial-up users than before. Taking into consideration the typical pattern of users starting out as dial-up surfers before moving to broadband, the future growth of the high speed access arena also looks bad.

There are many possible reasons behind the slowdown, including a saturation of users who want/need higher speeds and a perceived lack of cost-justification to pay the higher broadband subscription rates by current dial-up users. According to John B. Horrigan, Director of Research at the Pew Internet Project and the report's author, “There are fewer people hankering for high speed now and that means less pent-up demand for broadband. … Today's dial-up users are older, less educated and with lower income than their counterparts in 2002.”

CHRISTOPHER'S OPINION
Sometimes things are so logical they are hard to believe. Although I understand the dial-up to broadband adoption pattern, it baffles me that people could still live with dial-up access. On the rare occasions I have to do it when traveling, it is hard for me not to give up completely.

The good news is that ISPs might feel like they need to drop prices to encourage new customers to sign-on, and I hope that will translate into lower costs for current users. Prices are already reasonable, but I would love to see them get cheaper.

But what do I know? The same argument can be made the other way. With a drying-up market and large investments in infrastructure, ISPs are going to need to keep their revenues up.

At least one thing seems to be for sure: the Information Highway won't be getting too terribly crowded anytime soon.

USER COMMENTS 58 comment(s)

Cost-Benefit Analysis(11:55am EST Fri Sep 23 2005)In reality, an “always-on,” open broadband connection tends to infuse problems in one's daily life that may not exist for the average dial-up user.

In particular, the influx of malicious files such as adware, malware, spyware, spam, spim, pharming and phishing tends to turn people off of the novelty of the Internet.

At the very least, someone could easily control and protect their technical resources more effectively with a simple dial-up access plan versus an open broadband connection that leaves one susceptible to online attacks. – by Civil Libertarian

Its about time they realized it…(12:20pm EST Fri Sep 23 2005)The cost structure of these broadband service providers is just over-priced & ridiculous. Only lower costs can get more users of broadband. Comcast, are you listening??? – by Comcaster

Christopher(12:20pm EST Fri Sep 23 2005)“Prices are already reasonable”?Maybe, unlike you apparently, folks have noted the prices of broadband overseas as opposed to here in the “technology leader”, the good old US of A. Maybe people are waiting for the cost of broadband here to catch up with the rest of the world?– by Nobody Special

I want to pay the $15 per month that new subs pay(12:22pm EST Fri Sep 23 2005)and stop paying $45. I'd be happy to go back to 1.5 from 3Mb/s for $25, but to be forced to continue paying $45 or go back to dailup for a year, and then re-join seems unfair in an area where there is a cable monopoly. You can go dish or pots DSL, so I guess it's legal. – by tech

oh yeah(12:37pm EST Fri Sep 23 2005)Forgot my credit card's are Maxed out and i lost my job.back to dailup. – by busted@disgusted

Think it through(12:42pm EST Fri Sep 23 2005)Busted….Maybe you lost your job because people didn't want to pay the prices for your last employers product or service so they couldn't afford to keep you around….Think about that next time you want to pay for something or your life will suck. – by Jman

Technology changes things ..(12:45pm EST Fri Sep 23 2005)When dial-up was the only option, people paid $30 for basic phone, $20 for Internet, plus long distance. So, the cost of ownership for a Dial-up was $50/month plus taxes and long distance.

Cell phones were not a viable option, due to costs. Now, I have a cell phone with caller ID, voicemail, free long distance, no roaming and I carry it with me, or turn it off at my discretion.

Cable comes along with broadband, and people like me decided to bail on the land line, get a cell phone and cable for less than what I was paying for my land line and dialup.

Now, 8 years ago I understand why they charged $40/month for broadband cable routers were $350 each, and the service as limited. Today I can buy a cable modem for ~$50, the cables are already paid for, and adding ethernet capabilities is a simple matter of flipping a switch. So, the only justification for the $40/month charge is lack of competition.

We need to have competition. – by Hodar

Irony(12:53pm EST Fri Sep 23 2005)One problem that comes with the high cost of broadband is that you need it more than ever for job searching when you are unemployed. I suppose you could go to the library… – by Shonky

Don't forget…(1:16pm EST Fri Sep 23 2005)Cable broadband is not available everywhere. I know it's not here in my part of Maryland (40 miles NE of Baltimore) and there are no plans to get it here in the near future.

DSL requires that you also spend $33/month on a land line on top of the DSL cost. That's a small fortune. The Verizon land lines rarely work to begin with, so that doesn't help.

Satellite is much slower and much more expensive than the other two. Way out of my price range.

Guess what, because of the really unreliable Verizon residential service, I can't even get lowly dial-up. I'm internet free at home now! Only the T1 at work exists for me as an option now.

Broadband specifically, and telecom in general, is pretty much primitive in the USA these days.

Hodar(1:21pm EST Fri Sep 23 2005)Depending on the choices you have in your area, the use of a VOIP provider with a broadband connection can be less expensive than a landline and dial-up. This is if you are comparing the features you along with some long distance usage.

That was how I justified the cost of broadband. The bottom line is that I am actually spending less per month on all my communications needs (local & long distance phone, Internet) with my broadband + VOIP compared to landline + dial-up, and I am getting far better performance and satisfaction so far.

Of course, for many the equation would still have landline + dial-up being less expensive due to local monopolies and general toll call usage requirments of the user. – by PCFan

Zinner(1:28pm EST Fri Sep 23 2005)Verizon has a plan that they don't talk about that costs a total of $17 a month for landline and all associated fees. That is what I am paying. Then the $30 per month for DSL, and $25 for Vonage puts me at $72 a month with no further toll charges. Before I was paying a $54 a month for a landline (with the features I wanted) before long distance was added to the bill, plus $10 a month NetZero. That was $64 before the long distance pushed it up into the mid 70s to low 80s.

Does your area get SBC or Cavalier? They both have better pland than Verizon. – by PCFan

Handy Tips!(1:37pm EST Fri Sep 23 2005)I like to keep the dish washing liquid near the sink. I keep mine in the cupboard directly beneath the sink so that is always close by when I need to wash the dishes. – by vizfan

Think its a matter of(1:45pm EST Fri Sep 23 2005)Everyone who is going to get it has gotten it, and those that want it, can't get it.

As for $40+ a month broadband fees, these services are still in their infancy, and Cable/Phone providers are constantly improving their networks to make broadband internet more reliable and faster.

To say you don't understand why broadband still costs $40+ shows your ignorant of the trends in broadband.

And there is competition, there are many DSL ISP's competing against the large phone companies by offering DSL service for $10 – $20 less a month, but the reason why the large phone companies don't drop their rates is that they need to pay for expanding and upgrading the networks.

Anyways, I used to gripe about the high broadband costs, but after getting VOIP, it makes more then enough sense to pay $30-$40 for broadband and then get cheap VOIP on top of that. Once they introduce IPTV it will make much more sense to pay a lot for your internet access if you can get telephony and television for far cheaper then with the traditional source.– by Topher

The prices are too high now. The wireless phone internet for PCs I looked at just a few weeks ago is fast enough (738 KB/s) but right now all the extras you are required to buy and the 2 year commitment makes it a bad deal for me. Actual WiMax is very expensive with too many strings as well.

Maybe in the future!

– by Zinner

dsl is cheap, for me(3:15pm EST Fri Sep 23 2005)SBC offers DSL in my area. For their low end DSL (768Kbps – 1.5Mbps) it is $19.99. I pay $24.99 a month for the 1.5Mbps – 3.0Mpbs. When you compare the $24.99 to AOL for instance, you pay about $1 more but get speeds about 50 times faster. Maybe prices for DSL isn't that cheap elsewhere, but they will come down.

Oh, and one other hint, if the dsl cost goes down for new subscribers, call your ISP and ask for that cheaper rate. I went from paying $35 to $24.99 just by calling and asking for the cheaper rate. It works with SBC, you can try it with your ISP as well. – by dreek

Maybe……(3:32pm EST Fri Sep 23 2005)I believe that one of the reasons for the slower adoption of broadband is because of the continuous rising prices. It's too expensive and if you want it cheaper, you have to bundle it with another one of their services (i.e. Comcast). I used to be a cable (Comcast) customer for years. I had their TV and HSI. I got fed up with the way Comcast was treating their customers and potential customers. The continuous price increases on TV (basic cable) with no improvements in our service. To me, I believe Comcast is price gouging. Upping price on Analog TV when nothing changes…only degrades (less channels). Their Digital Cable isn't all that great either….”one moment please” messages, pixelation and picture freezing….all this even after Comcast comes out and says no problems here. The HSI, signal drops when you least can afford to have it drop. I got tired of it all and moved to DirecTV and DSL and still have my good ol' landline telephone. It's things like what I described that are possibly to blame for the slower adoption of broadband….too high of prices, technical problems, etc. – by SBacklin

Piracy(3:45pm EST Fri Sep 23 2005)It's funny, but when the sale of music CD's goes down by a few percent, they take ISP's and internet users to court blaming piracy for their woes, but when the adaptation of broadband takes a dramatic downturn in the midst of all this litigation, no one mentions the RIAA. Remember when SCO vs Linux was at it's peak? Check the numbers on new Linux server installations at that time. Why should anyone go broadband? The only thing the internet has to offer a home user which requires a fast connection will get you sued, or at least that's the image the industry reps are putting out there by suing old ladies and 12 year old girls. – by Only half

Broadband adoption slowin' down(3:57pm EST Fri Sep 23 2005)People using the internet with a frown,Disappointed by the slow speed,They went to the bathroom and peed,Coming to see if the downloads' done,Only to find that connection has run,Angered at the f**kin crap,You kick the computer and take a nap – by HAHAHAH

The problem is competition vs monopoly(4:05pm EST Fri Sep 23 2005)I called the cable ISP. They said to get the new pricing, $14.95, I have to drop out for 1 year and re-join a year later. They followed the big national companies as they raised speeds and lowered prices, but refused to give current users the new pricing. I can get dish (DirecT) or pots (SBC) for $14.95, but I'll lose 3Mb/s.I got rid of my home pots, but I have a business line pots still (yellow page). My family is “IN” and we pay $50 for 5 of us (unlimited ld, text, free pic phones).They are not selling VOIP right now, but if you are a broadband subsrciber, go in asn ask for it they will give you a bumdle. They anounced the “telesystem” last year, but if you ask about it starting you are sold a very expensive “demo” package that is only VOIP.Oh, they own the monopoly newspaper, and have always fought off all competitors and have never leased their lines. – by tech

Fascinating Discussion(5:30pm EST Fri Sep 23 2005)This is a fantastic discussion on the topic of broadband adoption, particularly in light of the illustration of “haves versus have nots” in terms of which locales have access to broadband connections versus which locales have access to narrowband connectivity exclusively.

I am a cable broadband customer as well, with the possibility of transitioning into a VoIP telephony provider within the foreseeable future. I would like to use a VoIP telephony provider that provides support for multi-line concurrent users such as a home-office configuration though.

Perhaps Vonage is the obvious choice. What is the general consensus of the Geek.Com community in terms of VoIP providers for home-office configurations? – by Civil Libertarian

re tech(5:57pm EST Fri Sep 23 2005)At least Civil libertarian is being civil. I mean it as a compliment. So why is that he should “get lost”. – by not2foul

It Just Figures…(6:05pm EST Fri Sep 23 2005)Well, I was a dial-upper until about 3 weeks ago, then I switched to the mid-range DSL plan with my current ISP. (PADotNet) It cost me ~$78 for the router, cable, first month of service, etc. And then, I pay $21 while my mom pays $17. I'm 16 yo with my first well-paying job, so this suits me fine…

As for the general slowdown of broadband adoption, getting DSL service in out area was a very dicey deal. The only phone service is good ol' Sprint and I wasn't quite sure if a DSL line exhisted in this teeny-tiny town. Even in the US, the Dark Ages live on… – by Kratos

The Internet gets boring after a while. Once you get through all time-wasting garbage, you'll only use the Internet for News and Porn.

Broadband is expensive also.

– by ETA HININ

Yeah right!(6:53pm EST Fri Sep 23 2005)“Today's dial-up users are older, less educated and with lower income than their counterparts in 2002.”

That's complete bullsh1t! I would like to have broadband, but it simply is not available in my area. The only alternative is two-way satellite and that services sucks and is way too expensive. In a town several miles away they do have DSL but it's $50-60 per month plus landline costs. That's simply too expensive. I would love to have that SBC price of $14.95 per month. But DSL or cable simply are not available in alot of areas of the USA. Besides isn't the USA pretty far behind in broadband adoption compared to the rest of the world? Come out with a good “last mile” solution that is affordable and you'll see that broadband adoption rate skyrocket. – by yuk

lol(10:41pm EST Fri Sep 23 2005)Comcasts problem is like any business. They have employees who organize their labor and demand more money to work less and with even less education of themselves, Just like western Pennsylvania. 30 Years ago about 60 percent of the jobs were union and now less than 3 percent are still in business. Hmm wonder why that happened? – by PricedOutOfMarket

is WiMAX the death of DSL ?(3:39am EST Sat Sep 24 2005)If i can run an ISP over 49 square miles with minimal investment… can putting the phone company out of business really be considered bad ? – by fred

DSL or Cable.(12:57pm EST Sat Sep 24 2005)Lucky for COMCAST my company pays for my broadband. They figure what a deal for 50 bucks a month they have me working at work from 7am to 6pm and at home from 9pm to 12. Pretty cheap way to get me to work another 3 hours..

But as soon as DSL is really in my neighborhood or if I can get cheaper wireless/wimax

Are you reading comcast.. 50 bucks is highway robbert – by Know it all

Re: PricedOutOfMarket(2:37pm EST Sat Sep 24 2005)>> Just like western Pennsylvania. 30 Years ago about 60 percent of the jobs were union and now less than 3 percent are still in business. >>

Maybe those businesses couldnít compete with the Chinese companies. Of course what American worker would be happy living like the Chinese? Unions are losing out and itís not a good thing for the American worker. Without effective unions, we can expect the sweatshops of the 1930ís to return. BTY, we are losing high tech jobs to foreign countries too so itís more than just a union issue. – by RealistII

HERES WHY IT HAPPENED(4:00pm EST Sat Sep 24 2005)Ok, all the people who can afford broadband have it, the rest can't buy themselves out of a cardboard box, and you expect them all to have broadband??

Listen…

The top 400 richest people in america are worth 1.12 trillion dollars. Thats 1 TENTH of our GNP here in america. 1 TENTH of the money in this country belongs to 400 people…

95% of everything in america is owned by the top 1%… So tell me how markets for expensive frivolous services are supposed to grow in this country when all the money is being hoarded by a small group of individuals??

You expect everyone to sacrifice for something as frivolous as broadband access when they can barely afford food and water??

Get a fvcking clue, the rich all got there broadband access, now everyone else is waiting for it to become affordable. – by hadbroadband

Move to the UK(12:01am EST Sun Sep 25 2005)I have a 4mb broadband connection for only £25 a month. Screw all these American firms that are greedy and clutch and cling onto money as if it's a guarantee of getting laid. – by Ricey

huh(12:19am EST Sun Sep 25 2005)since our government just loves to piss hundreds of millions even billions of dollars away, lets make the government pay for our internet connections or create a isp for public use. – by bla

Re: bla(5:20am EST Sun Sep 25 2005)A town close to me is managing their own community-wide wi-fi and charging something $20/mo. They took bids from contactors for the install. – by Dean

such intelligence from bla(9:30am EST Sun Sep 25 2005)blah blah blah – by Not an Idiot

I need speed!(10:30am EST Sun Sep 25 2005)I'm a pro gamer, () and I need the fastest connection I can get. I don't really care how much it costs. It's just what I need. The better the connection, the better I play, the more money I earn. – by NearCry

what would you expect(1:28pm EST Sun Sep 25 2005)the reason for this drop in sells is, that there are now way to many options with still no desent suplier. if they want to get a head there needs to be some kind of merger.Verison and insight would do well together. – by halo2_sucksass

Actually(11:59pm EST Sun Sep 25 2005)What I would love is FREE internet access. Maybe Google could give us all a nice a nice Christmas present. – by focus

rural people(2:10am EST Mon Sep 26 2005)It's hard to have a beautiful house in the country, yet have the slowest internet connection avaliable. As soon as i can get broadband (other then satalite) i will buy it, i swear, i just need access. – by rural guy

Expense…(8:20am EST Mon Sep 26 2005)Verizon currently offers a DSL package for $15 a month with a modem included. Probably with the extra fees n crap itll work out to be like $20. Whats dialup, like 15? plus hogs a phoneline…If you can't handle $20 a month, I really don't know what to tell you. Whatdya have a crack habit? Or were you too stupid to keep your pecker in your pants at 17 and have 43874328 dirty little kids running around now? Maybe you need to get AWAY from the computer and get a job, the price of broadband is the least of your worries. – by Commustomp

Commustomp(9:01am EST Mon Sep 26 2005)I forgot about Verizon's low end DSL. You are right. It's $15 a month. If you don't care about VOIP, then the 768down/128up will not matter to you. It's still far better than dial up. – by PCFan

All I have to say is:(9:09am EST Mon Sep 26 2005)FIOS is comming to my area soon FIOS is comming to my area soon! >

Tra la la $80 for 30mbps tra la la la la!

I'd sell body parts for that bandwidth at that price.

Another solution to you lo5ers that have to collect empty beercans for broadband…get a broadband connection and split it with a neighbor for fkcs sake! That halves your cost right there! – by Commustomp

Uh…(9:37am EST Mon Sep 26 2005)>>> Verizon currently offers a DSL package for $15 a month with a modem included. Probably with the extra fees n crap itll work out to be like $20. Whats dialup, like 15? plus hogs a phoneline..

DSL is not available everywhere. The technical limitations leave many without the DSL option. You are forced into a 1 to 2 year commitment. Veizon residential service is the most pathetic I've ever encountered. Many phone lines in the DSL area are too dirty to even work with it.

Life just isn't as simple as you believe.– by Zinner

Re: Zinner(10:47am EST Mon Sep 26 2005)True, lines suck in alot of places, i know three different that can barely milk 300kbps out of thier DSL.

The $15 thing is a 1 year commitment (honestly, who is going to get it for less than 1 year)

I personally have Verizon DSL with NO problems at ALL. My phoneline is ALWAYS up and my DSL is pulling in near maximum (2.3mbps out of a 3.0mbps line) and is ALWAYS up.

Before i moved ANYWHERE i'd check lines for clarity.

Unless someone lives TOTALLY in the bushes cable or DSL is usually available.

Satellite blows goats and is not an alternative.

If I had to move somewhere that sucked, I'd just invest in a t1, get some neighbors together, buy some good wireless hardware and have my own network.

– by Commustomp

Broadband is widely available(12:56pm EST Mon Sep 26 2005)and companies will continue to provide cheap service, but that doesn't solve the problem that new subs get $14.95 and current users pay $45.Why is it all of a sudden fashionable to bash people who say that things are not ok? I have 3 kids: 1 at Georgetown, 1 at ND and one still is private secondary school. I have 2 boats: one for trailering and one larger. I don't have HDTV or a DVD player, but there is a computer, TV and VCR in every room (6) but the bathroom, and my bedroom. I'm not cheap, but don't throw away money either.As someone who works with T1s often, your idea has many problems. Who's supplying a T1 to your bushes? – by tech

Re: Tech(1:36pm EST Mon Sep 26 2005)The T1 was just one solution.

I don't like to throw money away either, AND I ran into that whole new subscriber pricing also.

My solution was simple. I cancelled service in MY name and had my GF open it in hers the next day, I suppose if your wife has the same name, have a freind do it. Instant cheaper pricing. – by Commustomp

We'll try(3:02pm EST Mon Sep 26 2005)it today. Thanks. – by tech

Here's the real deal(11:34am EST Sat Oct 01 2005)The current ISP's of broadband are always upgrading their equipment for their current subscribers to compete with each other, so no one is installing in new areas where they will increase the subscriber base. They are spending too much time and money trying to hold on to their current customers that are switching to the latest and greatest that other broadband ISP's are offering. – by ncntrybear

Still on DSL?(8:02am EST Mon Feb 20 2006)I guess everybody has upgraded to T1, T3 by now, eh?– by Teacher